India Inc plans to raise Rs 40k cr in next 6 months: Study

NEW DELHI: The domestic industry plans to raise Rs 40,000 crore -- meant for adding capacity and retiring debts -- through qualified institutional placements (QIPs) in the remaining six months of 2010, a study said today.

"In the absence of virtually no regulatory approvals, India Inc has drawn up elaborate plans to raise a whopping amount of over Rs 40,000 crore through QIP... to retire its expensive debts as also to raise capacities and its modernisation," the study by Assocham and SMC Capitals said.

It noted that 50 companies, including Tech Mahindra, Essar Oil and Ansal Properties and Infrastructure, have already taken approvals for QIPs from their boards.

Capital markets are choosing the QIP route because capital markets seem to be becoming more stable, the study said.

It further said that QIPs have very limited regulatory restrictions. While it takes four to five months in the case of IPOs, FPOs or any other fund-raising mode, everything can be wrapped up in a matter of four-five days in the case of a QIP, it added.

"...(besides) in case of QIPs, when compared to a preferential allotment, there is no lock-in period. This, probably, is the single-most factor that makes the QIP instrument such a popular mode of fund raising," it added.

QIP is a capital-raising tool through which a company issues equity shares to institutional investors.